Forced Arbitration: How Corporations Use the Fine Print to Bully Americans

Buried in your credit card agreement, your employment contract, or in the click through agreement in your online purchase, is almost certainly a forced arbitration clause designed to trick you out of your constitutional rights.

Forced arbitration requires Americans to “agree” to surrender fundamental constitutional rights without ever realizing it. Most Americans believe forced arbitration is a kind of mediation or other voluntary process, but in reality, it is nothing of the sort. Mediation generally involves a third party who helps to facilitate a mutually agreeable settlement between two parties, but does not impose any judgment, while voluntary arbitration involves parties that choose to allow a third party to analyze and impose a judgment after a dispute arises. Forced arbitration simply eliminates this choice. Forced arbitration eliminates the right to hold corporations accountable in court when they break the law. Instead, legal disputes are funneled into a secret system designed by the same entities against whom the dispute has arisen.

In forced arbitration, there is no right to go to court, no right to a jury, no right to a written record, no right to discovery, no legal precedents to follow, no opportunity for group actions when it would be too difficult or costly to file a claim alone, no guarantee of an adjudicator with legal expertise, and no meaningful judicial review.

Without such checks and balances, the deck is stacked heavily against consumers. And that’s the point. The use of forced arbitration clauses has soared as corporations realize it allows them to circumvent courts and avoid accountability — what some state judges have described as the equivalent of a “Get out of Jail Free” card.

Read our new report, "Forced Arbitration: How Corporations Use the Fine Print to Bully Americans," to learn more about forced arbitriaton. Download PDF.